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Leading indicators up sharply in October

Shoppers pass a Banana Republic store in New York
Scott Mlyn | CNBC
Shoppers pass a Banana Republic store in New York

An indicator of U.S. economic activity rose in October, suggesting an improving pace of economic expansion ahead.

The Conference Board said Thursday its Leading Economic Index rose 0.6 percent to 124.1 in October. Analysts polled by Thomson Reuters forecast that the index would rise by 0.5. That is compared to a dip of 0.2 percent in the previous month.

"The U.S. LEI rose sharply in October, with the yield spread, stock prices, and building permits driving the increase," said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board.

"Despite lackluster third quarter growth, the economic outlook now appears to be improving. While the U.S. LEI's six-month growth rate has moderated, the U.S. economy remains on track for continued expansion heading into 2016."

The LEI is comprised of 10 components including manufacturer' new orders, stock prices, and average weekly initial claims for unemployment insurance.

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